S&P/ASX 200 Index (ASX: XJO) gold stock Vault Minerals Ltd (ASX: VAU) – formerly Red 5 Limited – has lagged most of its peers over the past year.
In afternoon trade today, Vault Minerals shares are down 0.8%, changing hands for 39.2 cents apiece.
That sees the share price down 2.5% over 12 months. Shares have rallied 18.2% so far in 2025.
By comparison, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains smaller miners outside of ASX 200 gold stocks – has gained 36.3% over 12 months. The All Ords Gold Index is up 29.3% year to date.
But things could be about to take a turn for the better for Vault Minerals shareholders.
That's according to Phillip Li, co-portfolio manager of SG Hiscock's Australian Small Companies Fund (courtesy of The Australian).
Asked which stock his fund holds that has the most near-term upside, Li said, "Vault Minerals is a recent addition and is among the more undervalued names in the gold sector."
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"There is still latent value in the gold sector. With the gold price holding up and production growth in focus, we see upside in a few names," Li said.
Gold is currently trading for US$3,357 per ounce. That's up a whopping 40.0% since this time last year.
As for the positive outlook for Vault Minerals shares, Li said:
The recently completed merger between Red 5 and Silver Lake Resources has created a more diversified and resilient producer, underpinned by high-quality assets such as King of the Hills and Mount Monger.
Li also sounded a positive note on the ASX 200 gold stock's leadership team. He noted:
While the management team may not be among the more promotional in the market, their track record of operational delivery, cost discipline, and integration execution speaks for itself. We view the combined group's operational depth as a core strength, particularly in a market where quality and consistency are increasingly rewarded.
Li pointed out that the Vault Minerals share price performance has likely been held back by its hedging positions. That's where a gold miner locks in some of its forward sales at a fixed price.
But those hedging headwinds are about to change for the ASX 200 gold stock.
"A near-term catalyst is the roll-off of Vault's hedge book," Li said.
"As the hedge unwinds, the company will regain full exposure to the spot gold price at a time when the commodity remains well-supported," he added.
"With improved free cash and upside to earnings, we see the potential for increased investor interest and a re-rating in the months ahead," Li concluded.
